IRS Lock-In Letter


Updated 07/09/2021



IRS Lock-In Letter

The IRS Lock-In letter is sent to an employer to deduct federal income tax withholding at a higher rate for an employee. Any W4 changes [marital status, exemptions [2019], etc., must not be changed by the employee. Currently these fields reside on the EMPLOYEE > PAYROLL > TAX screen in the Back Office.

Employees with an IRS Lock-In Letter are not entitled to claim exempt from withholding or claim amount of deductions or tax credits. The IRS Lock-In letter will specify the employee’s filing status for purposes of calculating the required withholding amount.


Available in the ADMIN TOOLS > SYSTEM > CONFIG OPTION > CONFIG OPTION BY FKNAME tab, the field AllowChangeHasLockInLetter grants the ability to set up permissions for a user or group to be able to update employees with IRS Lock-In Letters.



  • When an employee has an IRS Lock-In and the above field is checked, they will no longer be able to change the W4 parameters. In addition, Admins will get an edit if they try to make a change to the employee’s tax form or add/change deductions for the employee. See below:


  • In order to let the Payroll Admins know that an employee has an IRS Lock-In Letter, when they try to change or add a new deduction, an edit will be issued giving you the ability to continue to make changes if you have permission. Employees that get an IRS Lock-In Letter will increase their 401K amount, which will reduce the tax liability. These types of changes are not allowed. Changes that may be allowed are an increase in Health, Dental, or Vision premiums. This is not under the control of the employee and rather lies with the vendor.


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